Agricultural real estate values in the Kansas City Federal Reserve district were flat through the end of 2024 as credit conditions deteriorated slightly, said a Kansas City Federal Reserve Bank report.
The report was authored by Federal Reserve Economists Ty Kreitman and Nate Kauffman and was the result of a survey of 10th district banks.
Lenders said the value of non-irrigated farmland changed by less than 1% compared with the previous year. Land market conditions varied in some states, but in aggregate, values generally were unchanged, and sales volumes slowed over the past year as the farm economy weakened and farm loan interest rates remained at multi-decade highs.
Alongside subdued economic conditions, the share of lenders reporting lower farm income and loan repayment rates increased into the fourth quarter, and demand for non-real estate financing grew.
ECONOMIC CONDITIONS SUBDUED
Economic conditions in agriculture were subdued through the end of 2024 alongside weak crop prices, the Federal Reserve report said. In early February, the USDA forecasted considerable improvement in net farm income in 2025 alongside substantial ad-hoc government payments associated with the American Relief Act of 2025.
The outlook for crop revenues remained weak, but distribution of recently announced payments for disaster relief and economic assistance in the coming months could support farm finances in the year ahead, the report said.
Growth in farm real estate values in the 10th district flattened in 2024. Survey respondents said the value of non-irrigated and irrigated farmland in the region increased less than 1% and about 2% from the prior year, respectively.
Ranchland values grew slightly more during the final months of the year and increased by an average of about 5% over the past four quarters, the Bank said.
Farmland cash rents also generally remained unchanged throughout the past year, the report said. Similar to land values, farmland rental rates increased by less than 2%.
Following a similar path, ranchland cash rents increased by about 5% from the previous year, the report said.
CHANGES VARY ACROSS LAND TYPES
Changes in values varied across states and types of land, the Bank said. The value of non-irrigated land declined slightly in western Missouri and Nebraska but increased modestly in other states.
Ranchland values grew at least modestly in all states with slightly stronger growth in Kansas and the Mountain states, the report said.
The slowdown in sales was most pronounced in Missouri and Oklahoma, the Bank said. About 50% of lenders in Missouri and Oklahoma reported fourth-quarter sales volumes were down from a year earlier. In other states, only about 30% reported lower sales, and in Kansas the share was less than 15%.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $203.48 per cwt to $208.98, compared with last week’s range of $206.00 to $210.58 per cwt. FOB dressed steers, and heifers went for $322.59 per cwt to $327.62, compared with $323.19 to $327.97.
The USDA choice cutout Tuesday was up $0.07 per cwt at $315.77 while select was off $2.52 at $303.71. The choice/select spread widened to 12.06 from $9.47 with 111 loads of fabricated product and 29 loads of trimmings and grinds sold into the spot market.
The USDA-listed weighted average wholesale price for fresh 90% lean beef was $374.01 per cwt, and 50% beef was $111.94.
The USDA said basis bids for corn from feeders in the Southern Plains were up $0.03 at $1.20 to $1.33 a bushel over the Mar corn contract, which settled at $5.02, up $0.05 3/4.
The CME Feeder Cattle Index for the seven days ended Monday was $277.99 per cwt, up $1.69. This compares with Tuesday’s Mar contract settlement of $269.72, up $3.37.